Severn Crossing Toll

Written Evidence from Rail Freight Group

Executive Summary

· The Rail Freight Group is pleased to submit this evidence on behalf of the UK rail freight industry.

· We explain the rail freight capability of the existing Severn Crossings and review the most recent relevant reports from Westminster and the National Assembly for Wales.

· We note recent and potential increases in rail freight volumes and the environmental benefits of rail compared to road.

· We comment on the existing level of road tolls for the Severn Crossing and the future issues surrounding the level of the Tolls.

· We recommend that the road tolls should be maintained at existing levels and any profits so generated in the future should be allocated to funding improvements in rail freight capability across the Severn Estuary with consequent environmental benefits.

· We note that reducing or removing the road tolls will lead to increased road haulage with consequent adverse effects.

· Finally we outline the benefits of our proposal and how a "virtuous circle" of increasing modal shift would generate even more funding for rail freight capability.

Introduction

1. The Rail Freight Group (RFG) is the representative body for the UK rail freight industry. Our objective is to grow the volume of goods moved by rail in a cost effective way. We work to influence Government and transport policies in support of rail freight and to help our members to develop their rail freight services and therefore welcome this opportunity to submit evidence to the Welsh Affairs Select Committee Inquiry into the Severn Crossing Toll.

2. In submitting this evidence RFG has restricted its comments to issues that impact on the movement of rail freight across the Severn Estuary. We have not commented on other areas of the inquiry which are outwith our scope.

Rail Freight and the Severn Crossing

3. Rail freight between South Wales and England and vice-versa can travel either via the existing Severn Tunnel or via Gloucester. The Severn Tunnel is heavily used by passenger traffic in the daytime and is restricted in the size of the traffic that can pass through it (the "loading gauge"), although there is no restriction in the axle weights that can be accommodated (the "route availability"). From Gloucester rail freight has good access to the Midlands but access to London and the South East is via the restricted infrastructure of the line to Swindon via Kemble.

4. The previous Government announced plans to electrify the South Wales Main Line through the Severn Tunnel by 2017, which should mean an improved loading gauge is available through the tunnel as well as providing the capability for electric haulage of freight trains. This scheme currently forms part of the present Government’s Spending Review, but RFG hopes it will proceed in view of the clear benefits.

5. RFG notes that in its July 2009 report on cross border transport the Welsh Affairs Committee concluded that in the longer term there is a need for a second Severn rail crossing, although evidence submitted by DfT indicated the existing Severn Tunnel has the capacity to cater for forecast increases in demand over the next 20 years.

6. RFG also notes that in its January 2010 report on Future Railway Infrastructure in Wales, the National Assembly for Wales’ Enterprise and Learning Committee recommended the Severn Tunnel should be adopted for electrification and Network Rail commissioned to consider options for renewing the Tunnel in the longer term linked to the business case for a new High Speed Line from London to South Wales. (Recommendation 5). Later, as part of Recommendation 16, the Committee commends a higher priority and more resources be allocated to encouraging modal shift of freight from road to rail.

7. Demand for rail freight is growing year on year and there has been particular growth in intermodal flows, both to/from the deep-sea ports and also of domestic traffic, for example for the major supermarkets. Growth of rail freight traffic to/from South Wales is constrained by the present limitations of the Severn Tunnel, but Port developments on both sides of the Estuary will lead to increased demand for movement.

8. Rail freight can make a significant contribution to reducing emissions from inland movements. For example, rail freight produces around 15 grams/tonne km of CO2; whilst the equivalent number for HGVs is around 180 grams/tonne km (reference : DfT website at http://www.dft.gov.uk/stellent/groups/dft_foi/documents/page/dft_foi_612027.pdf ). Comparable data also shows rail freight delivers far lower levels of other pollutants such as CO, NOx, and VOCs.

Impact of the road tolls and their current levels

9. Tolls have been payable for the Severn Crossing since the first road bridge was opened in 1966. As such they are a recognised feature of the transport infrastructure in the region and developments in both South Wales and the Bristol area have proceeded on the basis they will continue, although there is an assumption the level of charges will remain reasonable.

10. RFG understands the issues regarding the continuance of the tolls once the bridges revert to public ownership in terms of capital repayment and ongoing maintenance, and that many will argue a reduction in the level of tolls should be implemented.

Future level of road tolls and their allocation

11. RFG wishes to suggest that instead of being reduced, road tolls should be maintained at current levels (in line with existing expectations) and the extra revenue/profits generated should be predicated towards funding improved rail freight capability across the Severn Estuary, either through electrification, capacity and gauge enhancements of the existing Severn Tunnel or the construction of a second rail Crossing.

12. Improved rail freight capability on the Severn Crossing will support and encourage modal shift from road to rail and consequently will bring the additional benefits of reducing carbon emissions as well as both the congestion and the damage caused by HGVs on the existing road Crossings, further reducing ongoing maintenance costs.

13. Conversely, reducing or removing the tolls will have a detrimental effect on rail freight by providing an immediate competitive advantage to road haulage. As a result rail freight’s market share is likely to be eroded with consequent increases in carbon emissions, road congestion and the maintenance required of the road Crossings.

Conclusion

14. RFG recognises the importance of road freight to the UK economy and does not support steps that adversely impact on its costs. However, it believes that in the case of the Severn Crossing there is a powerful argument that maintaining existing costs, which have long been built into the industry’s financial calculations, can provide a revenue stream that improves rail freight capability, encourages modal shift with consequent reductions in carbon emissions and reduces the impact of heavy freight vehicles which in turn will generate more revenue to support increased rail freight.

August 2010